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Standing orders governing The Pensions Regulator's board procedures

These standing orders are made under the board's powers, under Schedule 1 paragraph 18 of the Pensions Act 2004 (PA04), to regulate its own procedure and that of any of its committees.

Agreed by the board in February 2019.

Status of standing orders

These standing orders are made under the board's powers, under Schedule 1 paragraph 18 of the Pensions Act 2004 (PA 04), to regulate its own procedure and that of any of its committees.

The board also has the power under paragraph 20 to delegate its functions and powers, and maintains a schedule of delegations.

These standing orders may at any time be amended or varied by the board as it may determine, to aid the efficient execution of its duties.

Role of The Pensions Regulator

The Pensions Regulator (TPR) has a range of functions directed by six statutory objectives:

  • To protect the benefits of members of occupational pension schemes.
  • To protect the benefits of members of personal pension schemes where direct payment arrangements are in place.
  • To reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (PPF).
  • To promote, and to improve understanding of, the good administration of work-based pension schemes.
  • To maximise employer compliance with employer duties and the employment safeguards (introduced by the Pensions Act 2008).
  • To minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).

In undertaking its work TPR also has regard to the principles of good regulation. That is, to be: proportionate, accountable, consistent, transparent and targeted (PACTT).

Role of the board

The board’s key responsibilities include:

  • Setting the strategic direction of TPR and approving the Corporate Plan and Business Plan.
  • Setting priorities, high level objectives and key operational targets.
  • Monitoring performance against the key operational targets (or other output measures) by which the success of TPR is to be judged.
  • Overseeing management of corporate risk.
  • Ensuring adequate resourcing and effective resource management.
  • Ensuring that a sound framework is in place to manage the exercise of regulatory functions.
  • Making arrangements via the chair for and approving the appointment of the chief executive and executive directors.
  • Ensuring appropriate standards of governance, including keeping its own performance under review.
  • Ensuring timely submission of annual reports and accounts to the Secretary of State and the Comptroller and Auditor General.

Meetings of the board

The full board will meet on a regular basis, to a schedule as agreed from time to time by the board. In the absence of the chair the board will nominate a member, normally the Senior Independent Director, to chair the meeting, from amongst the non-executive membership.

Determinations Panel

The board is responsible for maintaining a determinations panel. The board will establish an appointments committee (see section 7 below) on each occasion that a chair of the panel needs to be appointed. The committee will nominate the panel chair and the board will then appoint the panel chair. On each occasion that members of the panel need to be appointed, the panel chair will nominate members and the board will appoint them. Subject to Schedule 1 (PA04), the panel will determine its own procedures.

Committee structure

This paragraph does not apply to the determinations panel or the appointments committee.

There will be the following standing committees:

  • non-executive committee
  • audit and risk assurance committee
  • remuneration committee

The audit and risk assurance, and remuneration committees shall be sub-committees of the non-executive committee. The membership of these committees shall not include executive members of TPR.

  • The board may establish any additional committees as it sees fit.
  • Committees may establish sub-committees as they see fit.
  • Members can be co-opted on to any committee at any time.

With the exception of the non-executive committee and its sub-committees, members of any committee may include individuals who are not members of the board. Members of sub-committees may include individuals who are not members of the committee. The majority of any committee or sub-committee must consist of individuals who are members of the board or staff of TPR.

The terms of reference of the non-executive committee are set out at Appendix A.

The terms of reference of the audit and risk assurance committee are set out at Appendix B.

The terms of reference of the remuneration committee are set out at Appendix C.

Appointments committee

An appointments committee will be established by the board whenever there is a need to appoint a determinations panel chair.

The committee will regulate its own procedure.

The committee shall consist of a chair, appointed by the chair of TPR from the non-executive members of TPR, and one or more persons appointed by the chair of TPR. At least one of the committee members, other than the chair, must be someone who is not a member of TPR, but must not be a member of TPR’s staff.

Delegations

The board has the power to delegate decisions to committees of the board, executive members, staff of TPR and others, in accordance with schedule 1, paragraphs 20 and 21, of the Pensions Act 2004 and The Pensions Regulator (Delegation of Powers) Regulations 2009. The board will maintain schedules of financial and other delegations setting out how these powers will be exercised.

Voting

Decisions of the full board or any committee will normally be taken by consensus but any member may call for a vote. Where necessary, voting will be by a show of hands and in any equality of voting the chair of each meeting shall have the casting vote. A full record of voting will be included in the minutes of that meeting.

Meeting adjournment

The chair of any meeting shall have the authority to adjourn the meeting for such period as he or she shall consider expedient. The chair shall fix the date and time at which the meeting shall be reconvened either at the time of the adjournment or at any time thereafter.

Quorum

The quorum for full board meetings will be two non-executive members and one executive. There will be no quorum unless at least one out of the chair and chief executive are present.

The quorum for all committee meetings will be two members of whom at least one should be a board member.

Apologies for absence shall be given in advance to the board secretary or another member of the corporate secretariat.

Decisions where members are not physically together

There may be occasions where it is not possible or practicable for a board or committee to physically meet together because of diary conflicts, time constraints or insufficient business. In such cases it may be an option to seek the board or committee's decision by post, telephone, or electronic means. In such cases all committee members must receive the same information, their views must be shared before a decision is made, and a full record of the decision must be taken and submitted to the next following meeting of the board or committee (as relevant).

Minutes of board meetings and committees

Minutes will record decisions reached, reports considered and where appropriate the main points of discussion. They will not generally record the name of the speaker unless specifically requested. Minutes will be despatched to board members as soon as possible after the meeting.

Board meeting minutes are generally summarised for publication on TPR’s website; such summaries will be publishable only after the minutes have been approved by the board.

The minutes of committee meetings will not be published routinely, but the chair of TPR may approve publication in any instance where that is considered to contribute to the effective carrying out of TPR’s functions.

Attendance of outside interested parties at meetings

In addition to any staff of TPR who may be required to attend meetings, the board or the chair on their behalf may invite such individuals, members or officials of other organisations as they consider appropriate. However, such invitees will not be entitled to vote.

General Counsel

The board has access as and when needed to TPR’s General Counsel. There is a standing invitation for the General Counsel to attend Board meetings.

Appointment and removal of internal auditors

The board, advised by the audit and risk assurance committee, will consider the appointment of the internal auditors and any questions regarding the resignation or dismissal of the internal auditors.

Secretarial support

The board secretary will co-ordinate the despatch of agendas, and attend and prepare minutes of all meetings of the full board, and the non-executive, audit and risk assurance, and remuneration committees. The secretary will not be entitled to vote. The secretary shall maintain minutes and other records associated with board and committee meetings, in accordance with TPR’s current records management and retention policies. A member of the corporate secretariat team may deputise for any of these functions at the discretion of the chair.

Declaration of interests

In accordance with the code of conduct for members of TPR’s board, the chair and board members shall declare any personal or business interests which may conflict with their responsibilities as board members.

Board members and any invited attendees from other organisations should declare as soon as practicable after a meeting begins if they have an interest, financial or otherwise, in a matter being considered. Such declarations should include the interests of immediate family members and persons living in the same household.

As a general rule, members and other attendees should not take part in, and should not be present for, discussions or decisions if they have a financial interest in the matter under consideration, or other interest which is clear and substantial.

In cases of doubt as to the extent to which such members and attendees shall participate, the chair shall decide, and the test should be whether a member of the public, knowing the facts of the situation, might reasonably think that a particular interest could influence the judgement of other members present.

Confidentiality

Written material provided to and discussed by board members and invited attendees from other organisations, and that has not been published, is not only confidential to TPR but may also constitute restricted information as defined in section 82 of the Pensions Act 2004 as amended or may be legally privileged. Such material is classified as Official – Sensitive – Governance and is therefore subject to controls associated with that classification. Such material, and any other matters which the chair of a meeting deems to be confidential, shall not be disclosed by board members to any parties external to TPR and shall not be disclosed by invited attendees from other organisations to any parties external to that organisation. Invited attendees shall also ensure that any individual in their organisation who is passed such material does not disclose it to any party external to that organisation. If in doubt a board member or invited attendee should consult the board secretary.

All written material relating to TPR’s board meetings is subject to the Freedom of Information Act 2000. Some items may be published through TPR’s publication scheme. Information that is not published will be considered for release on request, subject to the exemptions from release allowed for under the Act.

Board members and invited attendees from other organisations should refer any requests for information made to them, to the board secretary.

Appendix A: Terms of reference of the non-executive committee of TPR

Status of the committee

The committee is established under section 8 of the Pensions Act 2004.

Membership

The committee shall consist of all non-executive members of the board. It will be chaired by the chair of TPR.

Attendance

The board secretary or a member of the corporate secretariat team will provide secretarial support to the committee.

The committee may invite executive members of the board or other staff of TPR to attend to provide advice.

The committee may ask any executives or other staff attending to withdraw to facilitate open and frank discussion of particular matters.

Meetings

The committee will meet at least once each year. The chair may convene additional meetings as deemed necessary, or as requested by a member of the committee. Committee members will generally meet each year, without the chair, generally led by the Senior Independent Director, to reflect on the chair’s contribution to the committee and board.

Quorum

The chair and at least three other non-executive members of the board must be present for the meeting to be quorate.

Responsibilities

The committee’s responsibilities are:

  • to keep under review TPR’s internal financial controls and to assess whether they secure the proper conduct of its financial affairs
  • to determine the remuneration, subject to the approval of the Secretary of State, of the chief executive
  • to prepare a report on the discharge of the above functions for inclusion in TPR’s annual report

The committee has established two sub-committees whose terms of reference have been endorsed by the full board. The first function above is delegated to the audit and risk assurance committee and the second to the remuneration committee.

The committee will review this arrangement each year and recommend any changes to the board.

Reporting

The non-executive committee will report to the board.

Appendix B: Audit and Risk Assurance committee ā€“ terms of reference

Status of the committee

The committee is established as a sub-committee of the non-executive committee of TPR, under section 8 (7) of the Pensions Act 2004.

Membership

The audit and risk assurance committee shall comprise between three and five non-executive board members, including the chair of the audit and risk assurance committee. At least one member should have a financial qualification or recent and relevant financial experience. The chair of TPR shall not be a member of this committee.

The committee members and chair are appointed by the non-executive committee.

The board secretary or a member of the corporate secretariat team will provide secretarial support to the committee.

Reporting

The committee will formally report back to the accounting officer and the board after each meeting, including submitting draft minutes of the meetings. A formal annual report of the committee’s work (including an assessment of its effectiveness) will be provided to the accounting officer and the board at the end of each year to support finalisation of the accounts and the Governance Statement, summarising its conclusions from the work it has done during the year. The committee chair will also provide an annual summary of the committee’s work to the board.

Responsibilities

Under Section 8(8) of the Pensions Act 2004, the non-executive committee has delegated the discharge of its function as set out under section 8 (4) (a) of the Act to the audit and risk committee.

In carrying out this function, the committee will advise the accounting officer and the board on:

  • the strategic processes for risk management, information assurance, internal control and governance and the Governance Statement
  • the accounting policies, the accounts and the annual report of the organisation, including the process for review of the accounts prior to their submission for audit, the levels of error identified, and management’s letter of representation to the external auditors
  • the planned activity and the results of both internal and external audit
  • the adequacy of management responses to issues identified by audit activity, including external audit’s management letter
  • assurances relating to the management of risk, internal controls and corporate governance arrangements for the organisation
  • the effectiveness and independence of the external auditor and internal audit service
  • proposals for tendering internal or external audit services or for the purchase of non-audit services from contractors who provide audit services
  • anti-fraud policies, whistle-blowing processes, and arrangements for special investigations; and
  • the audit and risk assurance committee will also periodically review its own effectiveness and report the results of that review to the board

Rights

The Committee may:

  • Co-opt additional members for a period not exceeding a year to provide specialist skills, knowledge and experience.
  • Procure specialist ad-hoc advice at the expense of the organisation, subject to budgets agreed by the board.

Access

The head of internal audit and the representative(s) of external audit will have free and confidential access to the chair of the committee.

Meetings

The committee will meet at least four times each year. The chair of the committee may convene additional meetings, as deemed necessary.

At least two members of the committee at the time should be present for the committee to be quorate.

The committee meetings will normally be attended by the executive director of finance and operations, the head of internal audit, representative(s) from external audit – including (if appropriate) any sub-contractor appointed by the National Audit Office (NAO) – the Head of Corporate Governance (who is also SIRO) and a representative of DWP. The accounting officer will generally attend around twice a year and the head of regulatory assurance will attend regularly.

The committee may ask any other executive member of the board or staff of the organisation, or any other person, to attend to assist it with its discussions on any particular matter.

The committee may ask any or all of those who normally attend but who are not members to withdraw to facilitate open and frank discussion of particular matters.

The accounting officer or the board or the non-executive committee may ask the audit and risk assurance committee to convene further meetings to discuss particular issues on which they want the committee’s advice.

Information requirements

The committee will be provided with the following information in accordance with its agreed programme of business during the course of the year:

Internal audit

  • progress reports from the head of internal audit summarising:
    • key issues emerging from internal audit work
    • management actions in response to audit recommendations and anticipated completion dates for all critical, high and medium risk recommendations
    • any changes to the annual internal audit plan; and
    • work performed (and a comparison against planned work) for current internal audits in progress; and
    • any resourcing issues (should they arise) that affect the delivery of internal audit objectives
  • the draft internal audit strategy, and the version that is agreed
  • the head of internal audit’s annual opinion and report; and
  • quality assurance reports on the internal audit function

External audit

  • external audit’s draft Annual Strategy document (to include reference to audit fee and NAO engagement letter), and the version that is agreed
  • progress reports from the external audit representative(s) summarising work done and emerging findings, and
  • external audit’s management letter and audit opinion

Risk assurance

An assurance report will be issued to each meeting to update on assurance activities from the Executive Director for Finance and Operations, including updates from:

  • Head of Corporate Governance
  • the Head of Regulatory Assurance; and
  • the Head of the Enterprise Risk Team (the Head of Research and Analysis), as facilitator of the internal audit programme, and the Head of Internal Audit

Risk

  • reports summarising any significant changes to the organisation’s risk register and a copy of the risk register
  • reports on the organisation’s risk management strategy; and
  • reports on the organisation’s risk appetite

Other key documents to be provided

  • the board’s general, regulatory and financial delegations and reports on changes to these
  • the draft Governance Statement
  • the draft accounts of the organisation
  • reports on any changes to accounting policies
  • a report on co-operation between internal and external audit
  • a report on any proposals to tender for audit functions
  • reports on developments in corporate governance arrangements
  • proposals for the terms of reference of both internal and external audit
  • proposals for amendments to the committee’s terms of reference
  • proposals on governance of major programmes
  • reports on the management of major incidents, “near misses” and lessons learned
  • documentation on anti fraud policies, whistle blowing processes and the outcomes of any related investigations; and
  • any other reports commissioned from time to time by the committee

Appendix C: Terms of reference of the remuneration committee of TPR

Status of the committee

The committee is established as a sub-committee of the non-executive committee of TPR, under section 8 (7) of the Pensions Act 2004.

Membership

The committee shall consist of at least two non-executive members of the board. The chair of the board shall not be a member of this committee because of their role as line manager of the chief executive. No members of this committee may be executive members of the board or staff of TPR.

The membership and chair of the committee shall be agreed by the non-executive committee.

Attendance

The board secretary or a member of the corporate secretariat team will provide secretarial support to the committee.

The chair, chief executive, executive directors, or other staff of TPR may attend at the committee’s request to provide advice.

The committee may ask any executives or other staff attending to withdraw to facilitate open and frank discussion of particular matters.

Meetings

The committee shall meet at least once a year.

Quorum

Two members must be present for the meeting to be quorate.

Responsibilities

Under Section 8 (8) of the Pensions Act 2004, the non-executive committee has delegated to the remuneration committee the discharge of its function as set out under Section 8 (4) (b) of the Act, which relates to any chief executive appointed under paragraph 8(4)(a) of Schedule 1 of the Act.

Under paragraph 20(1) of Schedule 1 of the Pensions Act 2004, the board has delegated to the remuneration committee, with the agreement of the non-executive committee, the following responsibilities:

  • On appointment and any contract extension: to advise the Secretary of State in relation to the pay of the chief executive including base salary, bonus and any other components, under the terms of their contract, and in relation to pay levels for relevant comparable public and private sector roles.
  • Annually: within the terms of TPR pay remit agreed with the Secretary of State, to review the pay and performance of the CEO based on input from the Chair and of executive directors including approval of any pay award or annual bonuses to be awarded to them.
  • To keep TPR’s reward strategy under review, tracking and monitoring the implementation progress of the Job Evaluation and Reward Project as well as specifically the award, amendment and removal of market premia; and
  • To keep under review TPR’s human resource strategy and to consider emerging strategic people issues, especially in relation to talent attraction, development and retention and long-term human resource planning, with a particular focus on leadership capability, and to update the board accordingly.
  • Annually to discuss the balance of skills, knowledge, experience and competencies of the board, taking into account future challenges and opportunities and giving consideration to any gaps in skills or competencies, and to update the board accordingly.

Reporting

The committee will submit draft minutes of its meetings to the board. The committee chair will provide a formal annual report of the committee’s work to the board annually.